The National Reconstruction Fund will inject $15 billion to boost Australia's manufacturing capabilities in defense, renewables, transport, agriculture and other sectors. Several defense contractors received contracts this week, including XTEK being awarded a $26.9 million contract for small drones and Raytheon receiving a $115 million contract for engine enhancements. Northrop Grumman unveiled the B-21 Raider stealth bomber joining the US nuclear triad.

1. Page 1
LCC Asia Pacific
Macro Market Research – Defence & Defence Technology
Australian Market
Weekly Market Update
Industry Sector
Defence & Defence
Technology
Week Ending 2 December 2022
National Reconstruction Fund to Inject
$15b into Sovereign Capabilities
Joe Brereton
Associate Director
jmb@lccapac.com
Ashley Siles
Associate Director
ams@lccapac.com
LCC Asia Pacific Research | Australian Defence Technology & Engineering
Australian Market Updates Last Week
• The government has introduced legislation to Parliament to establish the $15 billion National Reconstruction
Fund to re-invigorate Australia's manufacturing base. In addition to defence capability, other focus sectors will
be renewables and low emission technologies, transport as well value-add in agriculture, forestry and fisheries.
• Beca has announced their successful delivery of the Defence Estate Data Improvement Program for the
Department of Defence. The outcomes of the three-year project will help enable data on Defence's extensive
physical property portfolio to be up-to-date and accurate.
• Electro Optic Systems' (EOS) US subsidiary, EOS Defense Systems USA has been awarded two contracts to
provide space tracking services to the US government. EOS will provide the services to the National Oceanic
and Atmospheric Administration (NOAA) government agency’s Office of Space Commerce.
• Hanwha Aerospace has conducted a technology demonstration of the Arion-SMET unmanned ground vehicle
(UGV) at Camp Humphreys, a US Army Garrison in South Korea, proving the vehicle’s mature robotic and
unmanned technologies.
• The Royal Australian Navy (RAN) is acquiring five Bluebottle uncrewed surface vessels (USVs) to enhance its
ability to experiment and advance the operational employment of uncrewed systems under, on and above the
water. This update follows a $4.9 million contract with Sydney-based Ocius Technologies signed last week.
• EPE has delivered a Defence Innovation Hub project to provide a prototype of stand-off chemical and explosive
detection. With Defence focused on human-machine teaming to remove soldiers and operators from
immediate threats, EPE was awarded a Phase 3 Defence Innovation Hub (DIH) Contract to advance the stand-
off chemical and explosive detection capability for a maritime boarding party application delivered in the
previous phase.
• Boeing has been awarded a contract to deliver two additional KC-46A Pegasus tankers to the Japan Air Self-
Defense Force (JASDF), bringing the total on contract for Japan to six. Boeing delivered the first KC-46A tanker
to Japan in October 2021, and a second in February 2022.
There was no significant acquisition or funding activity announced during the week.
Index
Percentage change %
Fixed income Yield
Change in basis point
Week YTD 12-months Week YTD 12-months
S&P ASX 200 Price 0.58 (1.92) 1.06 2Y Australian Note 3.00 (0.06) 4.06 7.28
Tokyo Price Index Price (3.17) (1.92) 1.43 5Y Australian Note 3.14 (0.07) 1.36 1.35
Straits Times Index Price 0.45 4.34 5.40 10Y Australian Note 3.39 (0.05) 1.03 1.01
Hang Seng Index Price 6.27 (20.18) (21.50)
KOSPI 200 Index Price (0.33) (20.08) (19.15) Rate Week YTD 12-months
S&P 500 Price Return 1.13 (14.57) (11.04) AUD to USD 0.68 0.55 (6.72) (4.52)
Dow Jones Industrial Average Price 0.24 (5.25) (0.61)
FTSE 100 (GBP) Price 0.93 2.32 5.99
Nicholas Assef
Founder & Principal
naa@lccapac.com

2. Sector Updates & Valuation Movements
Page 2
LCC Asia Pacific
Australian Defence Technology & Engineering
Ticker News/ Event
ASX:XTE
XTEK announced that it has received a purchase order from the Commonwealth of Australia’s
Department of Defence, totaling $26.9 million, for new Small Unmanned Aerial Systems (SUAS).
NYSE:RTX
Raytheon Technologies has won a $115 million contract for a F135 engine enhancement, also
referred to as an engine core upgrade.
NYSE:MAXR
Northrop Grumman and the U.S. Air Force unveiled the B-21 Raider. The B-21 joins the nuclear
triad as a visible and flexible deterrent designed for the U.S. Air Force to meet its most complex
missions.
LCC Asia Pacific Research | Australian Defence Technology & Engineering
Listed Defence Companies (with known presence in Australia)
Announcements During the Week
Ticker/ID Company Name
Market Cap
(AUD m)
Close Price
(AUD)
Weekly change (%) EV/ EBITDA EV/ EBIT
Asia Pacific
ASX:ASB Austal Limited 822 2.27 ▼ -7.3% 5.2x 7.2x
LSE:AVAP Avation PLC 144 2.08 — 0.0% 8.2x 13.7x
SEHK:232 Continental Aerospace Technologies Holding 157 0.02 ▲ 3.5% 3.9x NM
ASX:DRO DroneShield Limited 91 0.20 ▼ -1.2% NM NM
ASX:EOS Electro Optic Systems Holdings Limited 113 0.66 ▼ -0.8% NM NM
ASX:1CG One Click Group Limited 7 0.01 — 0.0% NA NM
ASX:OEC Orbital Corporation Limited 17 0.17 ▼ -5.7% NM NM
ASX:PTB PTB Group Limited 203 1.60 ▼ -1.5% 9.2x 11.5x
ASX:QHL Quickstep Holdings Limited 33 0.46 ▲ 2.2% 9.1x 32.3x
TSE:6355 Sumitomo Precision Products Co., Ltd. 210 39.71 ▲ 0.1% 9.5x 22.4x
ASX:XTE XTEK Limited 73 0.72 ▲ 15.2% 4.8x 5.9x
Europe
LSE:BAB Babcock International Group PLC 2,655 5.26 ▼ -3.2% 6.8x 13.0x
LSE:BA. BAE Systems plc 45,263 14.69 ▲ 0.8% 12.1x 16.1x
ENXTPA:AM Dassault Aviation Société anonyme 19,823 238.24 ▲ 0.8% 6.4x 7.6x
LSE:QQ. QinetiQ Group plc 3,588 6.27 ▲ 0.1% 7.2x 9.6x
ENXTPA:SAF Safran SA 77,310 181.13 ▼ -0.1% 15.4x 26.6x
ENXTPA:HO Thales S.A. 39,901 188.45 ▼ -0.7% 11.2x 17.9x
North America
TSX:CAE CAE Inc. 9,806 30.85 ▼ -3.0% 18.6x 31.8x
NYSE:GD General Dynamics Corporation 103,322 377.06 ▲ 0.8% 15.2x 18.2x
NYSE:HEI HEICO Corporation 28,754 242.83 ▲ 1.3% 34.6x 43.3x
NYSE:HXL Hexcel Corporation 7,701 91.49 ▲ 2.2% 19.1x 35.9x
NASDAQ:KTOS Kratos Defense & Security Solutions, Inc. 1,839 14.60 ▲ 5.9% 28.8x 145.3x
NYSE:LHX L3Harris Technologies, Inc. 64,568 339.11 ▲ 0.6% 14.2x 20.4x
NYSE:LMT Lockheed Martin Corporation 191,744 731.64 ▲ 2.6% 15.4x 18.3x
NYSE:MAXR Maxar Technologies Inc. 2,827 37.92 ▲ 8.1% 9.3x 28.6x
NYSE:NOC Northrop Grumman Corporation 123,812 804.43 ▲ 3.4% 10.7x 13.2x
NYSE:RTX Raytheon Technologies Corporation 219,188 148.93 ▲ 3.6% 15.1x 25.1x
NASDAQ:RKLB Rocket Lab USA, Inc. 2,966 6.27 ▲ 1.7% NM NM
NYSE:TXT Textron Inc. 21,947 105.12 ▼ -0.3% 10.8x 15.2x
NYSE:BA The Boeing Company 160,691 269.62 ▲ 2.5% NM NM

3. This general information has been prepared by LCC Asia Pacific Pty. Limited ("LCC"). The research is based on public information
obtained from sources believed to be accurate and reliable. This report is not intended to be “sell side research” and does not
provide opinion or recommendation whatsoever. LCC Asia Pacific seeks to have commercial relationships with companies
mentioned in this report.
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guarantee or representation, expressly or impliedly about this research. LCC accepts no obligation to correct or update the
information. No opinion or recommendation is made within this research. Information in this market update is sourced from a
variety of data points including Factset, News Outlets, the Australian Stock Exchange & company reports, media releases and
related content.
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made. © LCC Asia Pacific research@lccapac.com
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